Starbucks agrees to pay British taxes

Dec. 7, 2012

Following a backlash from the news of its British tax avoidance, Starbucks has since reversed course and has agreed to pay £10 million annually in taxes in that country.

According to the New York Times, the agreement is a direct effort to deflect protests over its previous lack of contributions.

"Having listened to customers and to the British public, Starbucks in the U.K. will be making changes which will result in the company paying higher corporation tax in the U.K. — above what is currently required by law," the company said in a statement.

The company will avoid some tax deductions in the next two years, and will pay the taxes even if it doesn't generate a profit in that market.

Starbucks came under fire in the past few weeks because of its tax practices. Other U.S.-based companies, including Google and Amazon, have also been scrutinized and called "immoral." Protestors have even called for boycotts of the companies.

Throughout its 14-year-presence in Britain, Starbucks has paid a total of £8.6 million ($13.8 million) in corporate taxes.

According to the New York Times story, the company reduced its tax bill in that country by channeling revenue through other company subsidiaries in jurisdictions where tax rates are lower; for example in the Netherlands.

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Topics: Coffee / Specialty Beverages , International , Operations Management

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